Developers today received legally binding contracts that will
commit them to pay to repair unsafe buildings.
The government has set a six-week deadline for developers to sign
the legal agreements and is warning that companies who fail to
sign and comply with the terms of the contract will face
significant consequences.
Legislation will be brought forward in the spring giving the
Secretary of State powers to prevent developers from operating
freely in the housing market if they fail to sign and comply with
the remediation contract.
The contract, which has been drawn up by the Department for
Levelling Up, Housing and Communities, will protect thousands of
leaseholders living in hundreds of buildings across England.
These innocent households would otherwise face costly repairs for
serious safety defects, including non-cladding related issues.
Under the contract, developers will commit an estimated £2
billion or more for repairs to buildings they developed or
refurbished over the past 30 years. This means that together with
the Building Safety Levy, industry is directly paying an
estimated £5 billion to make their buildings safe.
The contract also requires developers to reimburse taxpayers
where public money has been used to fix unsafe buildings.
This follows Secretary of State for Levelling Up, Housing and
Communities, , demanding developers are held
to account, which led to public pledges from 49 of the country’s
leading developers that they would take responsibility to fix
their own buildings, which will now be turned into legally
binding commitments.
Secretary of State for Levelling Up, Housing and Communities,
, said:
Today marks another significant step towards righting the wrongs
of the past and protecting innocent leaseholders, who are trapped
in their homes and facing unfair and crippling costs.
Too many developers, along with product manufacturers and
freeholders, have profited from these unsafe buildings and have a
moral duty to do the right thing and pay for their repair.
In signing this contract, developers will be taking a big step
towards restoring confidence in the sector and providing much
needed certainty to all concerned.
There will be nowhere to hide for those who fail to step up to
their responsibilities - I will not hesitate to act and they will
face significant consequences.
Dean Finch, Group Chief Executive at Persimmon, said:
Persimmon was proud to lead the industry two years ago with our
original pledge to protect leaseholders. Since then, we have been
making good progress on remediation and aim to be on site on all
developments by the end of the year.
The publication of the developer remediation contract is the
culmination of many months of hard work on all sides and we are
pleased to confirm our intention to sign the final document in
the near future, becoming the first developer to do so.
The terms of the contract are entirely consistent with our
existing commitment to protect leaseholders in multi-storey
buildings we constructed from the costs of remediating cladding
and life-critical fire-related safety issues. We are pleased to
reaffirm this commitment today and that we were able to work
constructively with the Government to secure the agreement.
Under legislation to be brought forward this spring, a
Responsible Actors Scheme (RAS) will be created, allowing the
Secretary of State to block developers who have not signed the
contract or failed to comply with its terms from carrying out
development and from receiving building control approval. This
will prevent them from operating as normal in the housing market
for as long as they do not resolve the problems of the past.
The Levelling Up Secretary will also take action to ban managing
agents and freeholders from taking commissions when they take out
building insurance. This is in response to a report from the
Financial Conduct Authority that suggested commissions make up
almost a third of premiums.
Government will also bring in further measures to make service
charges more transparent and empower leaseholders who want to
challenge their bills.
This follows confirmation from six major lenders that, from
earlier this month, they will once again consider mortgage
applications on properties that are covered by the leaseholder
protections in the Building Safety Act, or where the building is
eligible for a government or developer remediation scheme.
Once the contract is signed by developers, leaseholders will
benefit from a common framework of rights and responsibilities
that will get their buildings fixed without them having to pay,
and will require developers to inform residents in affected
buildings how they will be meeting these commitments.
Further information
The contract can be found here
Under the contract, developers will commit to more than £2
billion of repairs to buildings that are 11 metres or above which
they developed or refurbished over the past 30 years.
